IRS requires ALEs to report the employee’s health coverage information on Form 1095-C. To report the information, ALEs must be clear about the Safe Harbor Codes that should be entered on the ACA Form 1095-C.
The IRS has designed two set of codes to provide employers with a way to describe the offers of health coverage on each Form 1095-C. Each code indicates a different scenario regarding an offer of coverage, Section 4980H Safe Harbor Codes and other relief for ALE Members.
The following topics will be more specific about the codes to be reported on line 14 & 16 of Form 1095-C.
Line 14 of Form 1095-C is used to report information about the coverage offered throughout the year. The offer of coverage made to an employee for each month of the year includes health insurance coverage offered or not and the type of coverage.
The IRS has designed sets of codes 1A to 1K which describes the offer of coverage.
Take a look at the below table to know about the code series 1 to be reported on line 14 of
It represents the qualifying offer offered to full-time employees.
The Minimum Essential Coverage (MEC) providing Minimum Value (MV) offered to the full-time employees with employee's contribution was equal to or less than 9.5% mainland single federal poverty line. Also, it represents the contribution at least minimum essential coverage offered to spouse and dependent(s).
It represents the minimum essential coverage providing minimum value offered only to employees. But the coverage was not included for spouse or dependent(s).
It indicates Minimum essential coverage providing minimum value offered to the employees. It also represents the offering at least minimum essential coverage to dependent(s), but not the spouse.
It indicates Minimum essential coverage providing minimum value offered to the employees. It also represents the offering at least minimum essential coverage to Spouse but not the dependent(s).
Use code 1J if the coverage for the spouse was offered conditionally.
Use Code 1E, if minimum essential coverage providing minimum value offered to employees and at least minimum essential coverage offered to dependent(s) and spouse.
Use code 1K if the coverage for the spouse was offered conditionally.
Use “Code 1F” Minimum essential coverage NOT providing minimum value offered to employees, employee and spouse or dependent(s), or employee, spouse, and dependents.
Use code "1G", if you offer the coverage for at least one month to an individual who was not an employee for any month of the calendar year and the employees who enrolled for one or more months of the year in self-insured coverage.
No health coverage or not offered minimum essential coverage to the employees, which may incorporate one or more months in which the individual was not an employee.
Use Code “1J” if Minimum essential coverage providing minimum value offered to employees and at least minimum essential coverage conditionally offered to a spouse, but not offered to dependent(s).
Use Code “1K” Minimum essential coverage providing minimum value offered to employees; at least minimum essential coverage offered to dependent(s), and conditionally offered to spouse.
Line 16 of Form 1095-C is used to report information about the coverage that an employee enrolled in, and how the ALEs meet the employer shared responsibility "Safe Harbor" provisions under Section 4980H.
Employers meeting the following conditions must complete line 16 through the Code Series 2.
The table below explains the code series 2 to be reported on line 16 of Form 1095-C.
Use Code 2A, if the employee was not employed on any day of the calendar month.
Do not use code 2A for a month if an employee of the ALE worked for any day of the calendar month and an employee terminates employment with the ALE Member.
Use code 2B if the employee is not a full-time employee and did not enroll in minimum essential coverage, if offered for the month. Also If the employee terminated their employment before the end of the month but did enroll in coverage use code 2B.
Use code 2C if an ALE Member offered health coverage to the employees for each day of the month.
Do not use this code for the following scenarios:
Use code 2D, if an employee is in a section 4980H(b) Limited Non-Assessment Period for any month.
In which the multiemployer arrangement interim guidance applies for that employee for any month, despite whether any other code in Code Series 2 might also apply.
Use Code 2F if an ALE member applies the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year.
Use code 2G if the ALE Member uses section 4980H federal poverty line safe harbor to find affordability for purposes of section 4980H(b) for any month.
Use code 2H if the ALE Member used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for any month.
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